ECB negative rates not harmful, but inflation rise to stay elusive – Reuters poll

The latest Reuters poll of 41 economists showed that a majority of them believe that the European Central Bank’s (ECB) negative interest rate policy is not harming the Eurozone economy but it is doing little to ramp up the price pressures to reach the central bank’s objective.

Key Findings:

“More than two-thirds — 30 of 41 — of economists who answered an additional question in Feb. 10-14 Reuters survey nevertheless said the policy is not doing more harm than good to the Eurozone economy.

The latest Reuters poll again predicted Eurozone inflation would average 1.3% this year, unchanged from last month’s estimate, and fall short of the target until at least 2022.

Eurozone GDP growth was expected to average 0.2%-0.3% every quarter through to 2022. But the forecast for full-year growth this year was lowered for the first time in five months to 0.9%, the lowest since polling began for 2020.

The ECB deposit rate would stay at -0.5% and the refinancing rate would remain at zero until at least 2022, unchanged from last month.

A notable minority — 11 of 41 economists — said the ECB’s policy of negative rates was hurting the economy more than stimulating it.”